The company is looking into the feasibility of producing a super-economical, super-green car based on the Up! city-car concepts revealed at the Frankfurt, Los Angeles and Tokyo motor shows 12 months ago.
The VW board has approved funding to produce at least one of the Up! triplets, and a model capable of covering 100 kilometres on just two litres of fuel – 141.25mpg – is a distinct possibility.
Dr Ulrich Hackenberg, VW's research and development chief, said: 'We could do it with the right engine and transmission, low weight and good aerodynamics.'
VW is believed to be developing new two- and three-cylinder engines for the Up!, plus new transmissions.
These would also be available for future Polos. However, the need for 'bigger synergies' with drive systems means VW has had to abandon the rear-engined, rear-drive layout of the Up! concepts in favour of conventional front-engine, front-drive for the production model.
Hackenberg believes it is possible to do this without losing the proportions and size of the Up!, which was one of the stars of the 2007 Frankfurt show. 'It's my job to realise the proportions of the car and to do it with front-wheel drive,' he said.